Legal Advice Privilege and the Corporate Client
| Author | Joan Loughrey |
| Date | 01 July 2005 |
| DOI | 10.1350/ijep.2005.9.3.183 |
| Published date | 01 July 2005 |
| Subject Matter | Article |
THE INTERNATIONAL JOURNAL OF EVIDENCE & PROOF 183
LEGAL ADVICE PRIVILEGE AND THE CORPORATE CLIENT
S
Legal advice privilege
and the corporate client
By Joan Loughrey
*
University of Leeds, School of Law
Abstract This article considers the question of which corporate communications
attract legal advice privilege. Specifically, it assesses the implications of
adopting, on the one hand, a narrow ‘control group’ test and, on the other, a
broad ‘dominant purpose’ test for determining the scope of privileged
communications. The Court of Appeal’s decision in Three Rivers DC v Governor
and Company of the Bank of England (No. 5) is compared with approaches adopted in
other jurisdictions, particularly the United States. It is concluded that both
tests have identifiable shortcomings. However, in light of the human rights
implications of applying a broad test, it may be preferable to opt for a restrictive
approach to identifying the corporate client in this context.
ince the middle of the 18th century the case law on legal professional
privilege has been dominated by disputes with corporate bodies. Formerly
these were the railway, tram and omnibus corporations and, latterly,
registered companies. Yet despite the role played by the corporation in the
development of the law of privilege, the operation of privilege in the corporate context
is plagued by uncertainty. A current controversy, ignited by the Court of Appeal
decision in Three Rivers DC v Governor and Company of the Bank of England (No. 5) (hereafter
Three Rivers (No. 5)), concerns the identity of the corporate client, an issue that has
never been satisfactorily addressed.1
The aim of this article is to examine and assess the available tests for determining
which corporate communications are protected by legal advice privilege.2 Legal advice
privilege protects communications between the client and its lawyer and does not
protect communications with third parties. The law remains unclear regarding
* Email: J.M.Loughrey@leeds.ac.uk.
1 [2003] EWCA Civ 474, [2003] QB 1556.
2 This article will not consider the issue of the type of advice which attracts privilege, the point
addressed in the recent House of Lords decision in Three Rivers v Governor and Company of the
Bank of England (No. 6) [2004] UKHL 48, [2004] 3 WLR 1274. For a discussion see N. Andrews,
‘Legal Advice Privilege’s Broad Protection—the House of Lords in Three Rivers (No. 6)’ (2005) 24
CJQ 185 and C. Hirt, ‘Legal Advice Privilege in the Context of Inquiries: Time for Review?’
(2004) Business Law Review 220 (discussing the Court of Appeal decision).
(2005) 9 E&P 183–203
184 THE INTERNATIONAL JOURNAL OF EVIDENCE & PROOF
LEGAL ADVICE PRIVILEGE AND THE CORPORATE CLIENT
what communications made by an employee or officer of a corporate entity count as
client, rather than third party, communications so as to be entitled to the protection
of legal advice privilege. The failure of the case law to resolve this issue is probably
because in many cases litigation privilege will apply. This privilege protects
communications not only between the client and its solicitor but also between the
client or its solicitor and third parties where litigation is pending.3 Generally it has
not, therefore, been necessary to determine whether a communication from a
corporate employee should be treated as a communication from the corporate client
or not. The Court of Appeal decision in Three Rivers (No. 5) will be assessed but, as it
gives little guidance on the correct approach to the issue, the more mature
jurisprudence and literature in the United States on the issue will be considered.
This contains a range of tests but two will be singled out: the subject-matter test, a
version of which exists in the United Kingdom in the form of the dominant purpose
test, and the control group test. It will note that a choice between the various tests
cannot be made on principle but is a policy choice based upon the weight attached
to the competing public interests underpinning legal advice privilege and the
requirement to disclose.
The rationale and scope of the two heads of privilege
As noted, legal professional privilege comprises two separate privileges: legal advice
privilege and litigation privilege. The first protects communications made between
a lawyer, acting in his or her professional capacity, and the lawyer’s client, or the
client’s representative, where the purpose of the communication is related to giving
advice as to what should sensibly and prudently be done in the relevant legal context.4
It protects the ability of the client to seek, and the solicitor to give, advice in confidence.
It does not protect the ability of the client to seek out information not already
known to the client from third parties.5 In contrast, litigation privilege, sometimes
called third party privilege, protects communications between the lawyer or client
and third parties where the dominant purpose of the communication is to prepare
for existing or contemplated litigation.6
Litigation privilege arises out of the adversarial nature of litigation:
3 The absence of such a privilege in the United States has been cited as the reason for the more
developed body of case law and commentary on the subject of the corporate client which
exists there: I. Eagles, ‘Legal Professional Privilege and the Corporate Client’ (1987) 12 New
Zealand Universities Law Review 297 at 303. Although a lawyer’s work product is protected in
the United States this does not correlate precisely with litigation privilege and it is not absolute.
4Three Rivers District Council v Governor and Company of the Bank of England (No. 6) [2004] UKHL 48,
[2004] 3 WLR 1274 at 1287–8 per Lord Scott, at 1296 per Baroness Hale.
5Three Rivers v Bank of England (Disclosure) (No. 4) [2002] EWHC 2730, [2003] CP Rep 34 at [6].
6Waugh v British Railways Board [1980] AC 521, HL.
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